Original version

BBC World Service schedule for American satellite radio and the Caribbean

BBC World Service Americas and the Caribbean

Business Daily

Factual: Money

The daily drama of money and work from the BBC.

BBC World Service Australasia

BBC World Service East and Southern Africa Schedule

BBC World Service East and Southern Africa

BBC World Service Online

BBC World Service

BBC World Service South Asia

BBC World Service News Internet

BBC World Service Europe and the Middle East

BBC World Service West and Central Africa Schedule

BBC World Service West and Central Africa

BBC World Service East Asia

Business Daily: Are stock buybacks a corporate scam?

Bulletins

Are stock buybacks a corporate scam?

16/08/2019 GMT

BBC World Service - Business Daily, Are stock buybacks a corporate scam?

When corporations buy back shares is it for the good of the economy, or themselves?

Share buybacks are when a publicly-listed company uses some of its spare cash to buy up shares in itself, in order to drive the share price up and benefit shareholders. The practice has become so common that the amount of buyback money extracted from corporations exceeds their profits. Rita McGrath, a professor at Columbia Business School, explains how stock buybacks emerged. But are stock buybacks a good idea? Is it perhaps better to use that money to grow the business in other ways? And crucially, with so many executives paid in shares, is this just a way for them to maximise their own take? Nell Minnow of Value Edge explains why she thinks buybacks are ripe for abuse. But Ken Bertsch, Executive Director of the Council of Institutional Investors says buybacks don’t need to be totally reined in, but can be used for good.

Photo: Getty Images

Accessibility links

Programme Index

Business Daily

Are stock buybacks a corporate scam?

Genres

Formats

Brand

BBC World Service Americas and the Caribbean

About BBC World Service